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Setting up a consortium

Infrastructure organisation, Nova, explains how establishing a consortium made it possible for a group of Wakefield voluntary organisations to secure large contracts.

Background

Nova is a support agency for voluntary and community groups in the Wakefield district. It is both a traditional infrastructure support service and a consortium and started life in 2011 as the Wakefield District Wellbeing Consortium.

Before it was established, contact between Wakefield Council, the Primary Care Trust (PCT) and the voluntary sector was characterised by a relatively small number of relationships between voluntary organisations and employees in public agencies. Contacts tended to be with larger voluntary sector providers with a clinical and social care focus and the capacity to engage with commissioners.

There were two senior officers within the public health team at the PCT, however, promoting asset-based, community approaches who were very keen to support the sector becoming part of the prevention and wellbeing health agenda.

Also, Wakefield had taken part in a national programme to improve commissioning of voluntary sector organisations, and consortium development was a key development area, which meant there was support from several ambitious and pro-active local voluntary organisations.

The issues we faced

There had been little thoughtful, strategic engagement with the voluntary sector, with the exception of the development of community centres in the early 2000s, primarily set up for council-delivered adult education.

Large programmes, such as Troubled Families, were delivered by the Council, with the sector brought in on a piecemeal basis.

Most voluntary sector relationships in the PCT were with the public health service (now integrated into Wakefield Council) leaving very small numbers of voluntary providers with direct links to the new clinical commissioning group.

The local voluntary, community and social enterprise (VCSE) sector faced scepticism from some commissioners about its competence. This in part emerged from the partnership approach, which provided the sector very little opportunity to prove itself, and was also due to the local sector being relatively small in terms of the number of organisations and their size.

The actions we took

First Steps

The PCT paid for a consultant, well versed in consortium development, to run workshops for the local voluntary sector. At first there were some concerns. The development of a consortium was seen as producing competition between organisations, rather than as a helpful vehicle.

As the rationale for creating a consortium was better understood, consensus was achieved and a steering group formed. From this group the founding directors of a new company were chosen.

At that time the company was called the Wakefield District Wellbeing Consortium. The steering group worked hard to secure initial investment through the Social Enterprise Investment Fund.

This investment provided only a year’s operating costs. So there was great pressure to put staff in place and secure sufficient contract management income to enable the consortium to survive beyond its initial startup period.

In March 2011 the consortium hired a full-time business development manager, a part-time contracts manager and part-time administrator, who focused on the internal systems required for the new organisation, building relationships with consortium members and local commissioners, and sourcing contract opportunities.

First Year

It soon became clear that few substantial contracts were likely to emerge from the district council or the PCT which was morphing into a clinical commissioning group.

Staff advised the board the consortium should widen its scope to include large public service contracts beyond health and wellbeing or the consortium was unlikely to be sustainable.

There was also the possibility of other specialist consortia being formed that would compete among themselves, due to crossover of contract requirements, despite consortia comprising most of the same organisations.

This decision proved extremely wise when the opportunity arose to become the delivery partner for an employment support contract. It was a tough payment by results contract, co-financed by the European Social Fund (ESF) and the Department of Work and Pensions (DWP). It offered the consortium the opportunity to prove its worth and bring in a substantial contract for its members.

The consortium went on to tender successfully for two other contracts, Healthwatch Wakefield and the Bereavement Service. It was also brought in to deliver the Youth Contract by the main provider, on a non-competitive basis, and has been asked to provide low-value research and data collection projects for the public health team in Wakefield council.

Development

In October 2013, the consortium merged with Voluntary Action Wakefield District (VAWD) to create Nova, an unusual hybrid model bringing together functions of a support agency and contract management. This model allows voluntary organisations delivering contracts access to targeted development advice to address what is required to be contract-ready.

Nova also hosts the Assembly for the sector, and is able to influence decision-making in the district and ensure the sector is considered when funding decisions are made and programmes developed, for instance we are heavily involved with integration of health and social care and a shift in emphasis to prevention of poor health and wellbeing.

Positive outcomes

Initial and follow up support from the local NHS and Wakefield council.

Quickly securing a large contract to ensure sustainability.

Building a reputation for organisational competence.

Successful delivery of all major contracts (eventually – see below).

Merger of VAWD and the Wellbeing Consortium to form Nova.

Being perceived as the go-to organisation for the local sector.

Over £1m income generated for the local sector in 2014/15.

Negative outcomes

Payments for the initial large contract took a year to flow.

Some member organisations struggled to provide the paperwork needed to make claims.

One organisation was removed from delivery of a contract. Another faced this possibility (due to a paperwork problem).

VAT is a continual headache and potential problem.

Large contracts are now ending and there will be a gap in funding while new opportunities emerge (e.g. new European Union funding).

Lessons learnt

An excellent staff team is required – both highly skilled operationally and in respect of building relationships with members and commissioners.

Rigorous organisational structures and procedures need to be in place, particularly to deal with contractual decision-making and conflicts of interest.

A fair and practically supportive approach should be used with members who are not delivering well, but a consortium must be prepared to end involvement with an organisation if successful delivery of a contract is jeopardised.

You may need to pay for specialist service knowledge to support contract management – they are not necessarily the same thing.

A strong board is vital, with excellent financial, legal and commercial knowledge.

Be generous – ensure as many members as possible are involved and make involvement as straight-forward as possible for smaller organisations (e.g. spot-purchase, service level agreements rather than large contracts, absorption of risk).